Debates of Nov. 29th, 1994

World Trade Organization Agreement Implementation Act

[Leon Benoit, Reform, Vegreville, AB]

Mr. Speaker, the hon. member started by saying that today he was not going to speak about agriculture. He did not but I have a question with regard to agriculture.

The member knows that in Ontario the Ontario Wheat Board has an elected board of directors. This elected board of directors controls the operations of the Ontario Wheat Board. In the west the Canadian Wheat Board is controlled by an appointed group of commissioners.

I am looking for an open and honest opinion. Does it make sense that a marketing group, the Canadian Wheat Board, which is paid for by western Canadian farmers, be controlled by a group of appointed commissioners rather than by an elected board of directors as is in place in Ontario?

If the member does agree this should happen, can he offer any suggestions for making it happen quickly? If the hon. member feels that it should not happen, that farmers should not take control of their organization which they pay for, why not?

[Roger Gallaway, Liberal, Sarnia—Lambton, ON]

Mr. Speaker, what so often happens with members opposite is they give true meaning to the Latin term non sequitur. In any event, I would have to confirm first what he has had to say before I could really offer any comment.

[Alex Shepherd, Liberal, Durham, ON]

Mr. Speaker, I would like to thank the member for his every interesting speech on the petrochemical industry, something that I really do not know very much about. I do not have that industry in my riding.

He mentioned the education of people working in that industry. Does he feel that our institutions are keeping up with that? Are they able to graduate the talent we need to be effective in the international marketplace?

[Roger Gallaway, Liberal, Sarnia—Lambton, ON]

Mr. Speaker, I do not think there is any doubt that we are able to graduate the kind of talent necessary to operate. As I have mentioned, we have led the way in many respects in terms of gas technology and other facets of the refining industry which is part and parcel related to the petrochemical industry. We have led the way in that in terms of technology and in terms of costs of unit production.

We are having problems with an aging workforce. The technology has changed so rapidly that it is sometimes difficult for that workforce to appreciate or to have a full understanding of what the science applied is at that particular given point.

That is an industry-wide problem. It does not apply just to Canada. It is happening in the United States, especially in the gulf coast region where the industry must constantly upgrade its workforce, not because it is a poorly trained workforce but because the science and technology is changing to the point that these people cannot appreciate the complexities of the theoretical level of what is happening.

[The Acting Speaker (Mr. Kilger)]

It is my duty pursuant to Standing Order 38 to inform the House that the questions to be raised tonight at the time of adjournment are as follows: the hon. member for Regina-Lumsden-Taxation; the hon. member for The Battlefords-Meadow Lake-Government Appointments.

[Elwin Hermanson, Reform, Kindersley—Lloydminster, SK]

Mr. Speaker, it is a privilege to speak to Bill C-57, a bill to enact the World Trade Organization agreement.

Canada has been, is and I presume will be a trading nation. The part of the country that I come from, the west, was opened to European civilization through the act of trading; the traders from the Hudson's Bay Company and the Northwest Company. Their main purpose for exploring the west was on a trade mission. It has been a healthy environment for Canada whenever we have been able to trade freely and unhindered.

I wish to speak today with regard to the issue of farm safety nets. They are also impacted by the legislation that we are dealing with today.

We have to understand that agricultural safety nets are really risk management policies. They are mechanisms to help the farmer manage risks associated with producing a valuable commodity, food. We all need it.

The production and selling of goods such as food has a characteristic in addition to its value as a physical sustenance that makes it unique. That characteristic is perishability. There are unique risks associated with the provision to the world of a perishable commodity, that food that sustains us all.

It is these characteristics of food and the accompanying risks that lead us to develop risk management programs or our farm safety nets. The basic responsibility for managing the risk falls to the farmer just as it does for any other businessman. Farmers accept the fact that there are unique risks in producing food. They try to make wise decisions and carefully manage the product through its life cycle.

The other basic risk in farming in addition to this aspect of perishability is the highly fluctuating or uncertain income caused by forces over which farmers such as myself have no

control. Those forces are natural hazards, market cycles and trade distorting influences.

Therefore the risk management tools that farmers basically need are threefold: a crop or livestock insurance program to deal with the natural hazards, an income stabilization program to deal with market cycles and a trade distortion adjustment program to deal with trade distorting influences.

My party, and I was pleased to be involved with that, was able to consult widely across Canada prior to the 1993 election with farmers to develop their thoughts on these matters. We are happy to see that the Liberals who did not campaign on a post-GATT platform begin now to recognize that the old farm safety nets are going to have to change.

It seems rather odd that the Liberal Party, one of the oldest parties in Canada, did not start consulting with farmers earlier. In fact we are finding in this House that the Liberals are doing all their consulting after the election. I am proud to belong to a party that did its consulting before the election. I consider that to be one of the reasons why so many of us were elected. It also gives us great authority to speak on most of the issues that we address in the House, including this bill.

What are some of the concepts that have led to the rules and conditions and definitions of what now have to be internationally accepted farm safety net programs? There has been much talk about improving agriculture policy related to farm safety net support in recent years.

While the GATT talks have brought reform, there is still much to be achieved in practice. The organization known as the OECD, the Organization for Economic Co-operation and Development, consists of Australia, Austria, Canada, the European community, Finland, Japan, New Zealand, Norway, Sweden, Switzerland and the United States.

In the OECD overall support from government budgets and consumers to agriculture production still accounts for well over 40 per cent of the value of that agricultural production. In spite of some progress in tackling domestic farm programs, trade barriers remain stubbornly resistant to liberalization. Many of the alternative measures being put in place, including direct income support to farmers to replace subsidies, are still linked in some way to the production of agricultural commodities.

With respect to rules based trade, the feeling is commonly held by a lot of farmers that lawyers and bureaucrats are going to spend huge amounts of time and money trying to figure out how to beat the GATT rules. We already know, for example, that the EEC has kept its sum total payment policy in exchange for the U.S. keeping its nationalistic farm policy.

In other words, we are going to see a lot of wheeling and dealing and shifting and fudging of numbers in trade and support account columns. I suppose that such is the give and take of international negotiations but unfortunately farmers are the ones who are usually caught in the economic cross-fire.

Currently in the OECD, there are different types of safety nets and support programs for agriculture. First, of the total support that comes from consumers and government budgets to the OECD agriculture, around 71 per cent is transferred by policy measures that raise market prices received by farmers for their produce and are paid by consumers for their food beyond those existing in the world market. These are commonly known as commodity price support systems.

In Canada's case, the supply management system falls within this category. There are a lot of positive things that could be said about supply management but there are certainly a lot of negative things that have to be said about it as well.

One of the great negatives of the supply management system is the interprovincial trade barriers that we have within our own country. It is rather ironic that today we are discussing legislation that breaks down international trade when we are such a poor example to our international trading partners with our domestic policy.

Whatever form our support takes, the real problem for farmers, as my hon. colleague opposite from Malpeque has often stated, is low, real net market income for food. Farmers simply deserve a fair return on their investment. They want to get paid what their product is worth just like anyone else. They do not particularly want to have a lot of subsidies and government support.

I would suggest to hon. members opposite that the way to get more market income is to relax these types of price support policies that restrict the market forces. We need to trust a free and fair marketplace to bring the returns that we all want. I am happy to see that our rules based trading arrangements are addressing these type of subsidies and moving toward their elimination.

Second, only 13 per cent of farm support given is in the form of direct payments to farmers from government budgets. Much of this is transferred to the farming sector by policies that raise prices received by farmers through subsidies based on output or production. Although such subsidies do not directly affect the market prices paid by consumers, most of these measures are production related. They take the form of deficiency payments which are payments that make up the difference between a guaranteed price per unit of commodity and the actual market price. Headage payments are payments paid on the amount per head of cattle or sheep, et cetera.

The third type of support represents 16 per cent of the total and is largely made up of government's budgetary finance measures that are not targeted to specific farmers or commodities but to the agricultural sector as a whole. These include

publicly financed infrastructure, research, inspection, information or education and training.

We must note that the amount of support provided by these three different types of policy measures is very uneven across the OECD countries. Some countries give more weight and emphasis to the support of market prices, others to direct payments and yet others to non-targeted general support. Therein lies the problem of negotiation for rules based and equal treatment trade.

Therein also lies the potential for a harmonized movement away from market distorting programs to a free and fair international marketplace where farmers can make a living providing one of the most important products to humanity, the food we eat.

The pricing support programs and other subsidies I have referred to apparently cost consumers and taxpayers in OECD countries over $350 billion a year in higher food bills and in taxes. These policies distort trade patterns and heighten tensions between countries.

At the OECD ministerial meeting in 1987 their governments therefore committed themselves to reducing total support and to moving away from production and output related subsidies to other policy measures. One of the programs considered by GATT to be green is direct income payment to farmers which comes under the second type of safety net or support that I have referred to, direct payments.

I want to talk about the matter of direct income payments for farmers. We refer to it as an income stabilization program or ISP and that addresses the risk of market cycles. Direct income payments are literally that, explicitly budget financed income transfers made directly to individual farmers. Thus, they are distinct from the other policy mechanisms that transfer income to farmers indirectly either through commodity price supports which raise consumer prices or through lower input costs or through money spent on the farm sector as a whole.

The main advantage of direct income payments is that they can be targeted to the specific farmers whose situations are deemed to warrant such payments. This is in sharp contrast with price supports that are targeted at commodities which thereby give most benefit to the largest producers who may not warrant such support.

A commodity price support system such as our supply management also creates a prohibitive expense in its tool of production, the quota. It restricts farmer entrepreneurship because new entrants can only get in with large capital outlay through means such as large debt or a fortunate inheritance.

As a regulated marketing mechanism it does not transmit the signals of the market back to the producers quickly enough and reduces the innovative abilities of the industry. Therefore, the supply managed system must speed up its adjustment to liberalized trade as it will be in its own best interest. I know some of the members opposite are beginning to agree with this certainty even if they do it with reluctance.

Moreover, support to the income of farmers is more efficient than support to the prices of products. Price supports easily leak into the sectors upstream or downstream from the intended recipients or are wasted in competitive price subsidization between countries illustrating a phenomenon known as transfer inefficiency.

Well targeted direct income payments have a high degree of transfer efficiency because nearly all of the transfer ends up where it is intended, supporting farmers' incomes.

Moreover, in case members opposite are still not convinced of a better way, let me offer another advantage of farmer income support as opposed to commodity price support. Since income supports are financed from national budgets, they are more transparent and can thus be scrutinized more easily than price supports which are hidden in high consumer prices.

In all fairness and objectivity, we must admit that all measures of support including direct income payments will produce distortions to some degree. I am saying that those supports linked to pricing or production of specific commodities are the most distorting. Price supports are guilty, as I have mentioned above.

Production support systems are faulty because they give incentives to over or underproduce certain commodities, thus creating a moral hazard or a situation called farming the system, or they encourage unfriendly environmental practices. All in all it should be obvious that moving away from price and production support and toward income support is the wave of the future. All would be well-advised to get on board.

Direct income payments must satisfy two conditions in order to allow farmers to become more market reliant. First, the amount of payment should be generally fixed to a particular period of time and thus remain immunized from moral hazard. We do not want an income support program that would give an incentive to alter behaviour for monetary gain at the expense of environmental stewardship or fair business practices.

Second, the amount of payment should not be determined by the volume of current or future production of specific commodities or inputs to avoid biasing farmers' choices between specific commodities or those production techniques.

We must also continue to carefully define the objective of each type of direct income payment, whether it is income payment to help farmers adjust to alternative activities, a scheme to establish a minimum income, a measure to encourage environmental activities or a program to stabilize income be-

cause of market cycles. All these appear to be eligible under GATT. The situations for which direct income payments could be made available have to be very carefully specified to ensure there is the least distortion to the use of resources and to avoid back door channels of support to agriculture commodities, which would undermine the current reforms taking place.

How do we decide the amount of direct income payment? Basically there are two ways. First, we can assess the costs incurred by the farmer in undertaking activities for which payments are targeted. The second way is to evaluate income foregone by not undertaking an activity or measured against a predetermined base line such as loss of income due to market cycles compared to a recent income trend.

The duration of direct income payment programs depends on the duration of the problem being addressed. As far as possible, market-based solutions should be encouraged because they are longer term and are likely to emerge as reform evolves.

As I opened my comments I talked about the west being explored and developed because of free traders, because of people who wanted to go out, take some risks and try to make a few dollars. I suspect that as Canada moves into the global economy we can again expect to have some adventures, perhaps in a different situation, perhaps in the high tech civilization and society that we now live. It will be exciting for agriculture as well. There are great opportunities and this Bill C-57 is in a small way opening the door of opportunity.

While this bill will not solve all problems facing world trade, certainly not all of the problems facing agriculture, it is a step in the right direction. Therefore we offer our support for the GATT agreement, for the World Trade Organization Implementation Act and we hope this is one move toward reducing government funding for not only agriculture, but many commodities. It will give an opportunity for the market to sustain our industries, including the agricultural industry, so that not only farmers but all Canadians will enjoy lower taxes, a strong economy, and have a bright outlook on the future.

[Vic Althouse, NDP, Mackenzie, SK]

Mr. Speaker, the hon. member gave us a nice theoretical review of what would be nice if everybody agreed with the same kind of rules. We are debating though this world trade office which is international. It is not something we can control within the confines of one country.

As an aside I would point out that this country has had provinces ever since its inception and those provinces have certain powers which the hon. member has chosen in his theoretical discussion to ignore. They have control over production within the province which is why the marketing boards operate the way they do.

However my question concerns the international aspects of the bill. I would urge the member to turn his mind to our relations vis-à-vis other countries, particularly as they apply to assistance to agriculture since that was the main theme of his speech.

Since the negotiations began in 1986 I note that all countries made a verbal undertaking to start reducing subsidies and assistance to agriculture. I note that in the OECD countries he mentioned the aid to the agricultural sector has actually increased by 7 per cent in the past year over previous years. The trend is definitely not reducing assistance to farmers in OECD countries, with the exception of Canada which shows a decline of 12 per cent in the last year over the previous year in assistance to agriculture.

We hear a lot of talk about level playing fields. As a former hockey referee, Mr. Speaker, I know you understand the importance of having the two teams relatively well matched in terms of equipment and so on. It seems to me that what we have achieved to date with the verbal agreements is perhaps a field that will be more level than it was. However players on the Canadian team have hardly any equipment and players on the other teams we are competing against are very heavily padded and ready to go with the full support of their fans, their local national governments.

I read the documentation our country put together. I got it under freedom of information because it was not made available otherwise. I find it is the intention of the country under the Liberal government, and apparently supported by the Reform Party and others, to reduce the assistance to agriculture at an even faster pace than we have done to this point in time, even though the other countries are still a long way from catching up and taking off their special protections.

It is to the point that by the end of the decade when the six-year implementation stage comes and we start on the seventh, which is supposed to be the achievement of the new world order, Canada will be paying its agricultural sector $1.5 billion less than the agreement requires. We will be nice and squeaky clean. We will be out there playing hockey in our civvies while everybody else will have the same level of support they have now, with perhaps a few minor reductions.

I am wondering how he could describe that as fair or something he would advocate in terms of our relations with all other countries. How could this approach be something that he would support?

Mr. Hermanson: Mr. Speaker, I appreciate the comments of the hon. member for Mackenzie. I know he has a sincere interest in agriculture and a strong commitment to the industry.

He spoke just in passing about marketing boards and the fact that the provinces have been given some jurisdictional powers in that area. The actual act is a federal act and there have been some real discrepancies as a result of it.

For instance, I wonder if the hon. member for Mackenzie supports the fact that the province of Quebec has a leg up on the rest of Canada as far as the industrial milk quota is concerned. Provinces such as our province of Saskatchewan do not have fair access to the industrial milk market because of the inequities of the interprovincial trade barriers within Canada. It is certainly an area we need to rectify. It is an intolerable situation. It has certainly hurt the agricultural industry in our province.

With regard to his comments about the level playing field and being equipped to play in the game, I share some of the same concerns the hon. member has expressed but I mentioned in my speech that we were comparing apples and oranges.

I want to make very clear probably one of the most dastardly attempts at taking away the equipment we as Canadian producers need to play the game. It was the action undertaken by the minister of agriculture when he agreed to cut the export sales of durum to the United States by half. Certainly I would agree with the hon. member that actions such as that one when we have the trade agreements on our side are unacceptable.

Export sales of Canadian durum to the United States were steadily increasing. In fact they were on an ascending rate, an accelerated rate. Just because Uncle Sam south of the border put a little pressure on the Canadian minister of agriculture he forgot about the rules. He forgot about the equipment. He threw it away.

If we are talking about being out on the ice and playing the game, I do not think our agriculture minister has gone out on the ice yet. If he has he certainly has not gone across his own blue line. Perhaps he needs a penalty for not getting in the game. I do not know, Mr. Speaker, if you have ever called one of those but I think the agriculture minister needs one.

We have the NAFTA. We have the GATT. If we are to voluntarily give up just because somebody puts a little pressure on us when the rules are on our side and the judgments are on our side, it is wrong and a disgrace to Canadian farmers. I would call upon the minister of agriculture-and I am sure the hon. member for Mackenzie would as well-not to strip us of the equipment that helps us to play the game.

I am convinced that Canadian farmers, given a level playing field, will compete with any team. Just as we were able to compete with the Russians back in 1976, I am sure as agriculture producers and free traders we will be able to take on any competitor in the world and play an excellent game. I suspect when the final whistle blows and when the light comes on at the end of the third period we will win if the government does not get in the road and if our minister of agriculture pulls up his socks, grabs a stick and gets in the game.

[The Acting Speaker (Mr. Kilger)]

Just to make sure the House is clear, the member for Regina-Lumsden will speak for approximately 15 minutes and the member for Regina-Qu'Appelle for 5 minutes, which will make a full complement of 20 minutes.

[John Solomon, NDP, Regina—Lumsden, SK]

Mr. Speaker, it is my duty and my pleasure to speak in opposition to Bill C-57, the bill to enact the World Trade Organization legislation.

There are many reasons we oppose the bill as New Democrats. Before getting into the reasons I want to make a comment or observation. When we have a bill that is supported and put forward by the Liberal government of about 250 pages dealing with an agenda the large multinational corporations want to see completed, that is supported by Bloc members in the House and is supported by the Reform Party, it seems to me Canadians should pay particular attention to the implications of the bill. When a bill is supported by the Liberals, the Bloc Quebecois and the Reform Party there has to be something peculiar, mysterious, suspicious and probably disadvantageous to Canadians.

I challenge any member in the House to stand to say they have read the bill because I do not think they have. I do not think they understand the implications of the bill. However I have had occasion to read most of it. I have not read it all, but what I have read is unbelievable with respect to what the bill does to Canadian producers, agriculture producers, steel producers, sugar producers and other manufacturers.

The reason I say that is that the bill does not stand up for Canadians. Members of the New Democratic Party, the member for Winnipeg Transcona, the member for The Battlefords-Meadow Lake, the member for Mackenzie and others, have stood in the House of Commons to say that they have major concerns about the bill. We have heard the concerns in agriculture. We have heard the concerns about child labour and important social equities with respect to Bill C-57.

When I look at a bill I look at certain criteria the bill has to meet in order for me to support it. It has to be fair. It has to be equitable to those it affects. It has to be responsible. The government has to account for its actions with respect to the bill.

In my observations of the bill I can only conclude that if the legislation does not meet the criteria I have set out as being acceptable to Canadians and to the people of Regina-Lumsden whom I represent, it cannot possibly go forward without comprehensive debate and amendment.

As a result the New Democratic Party put forward amendments in the House to address issues of equity, fairness, responsibility and accountability. They were defeated by the government, by members of the Reform Party and by members of the Bloc Quebecois. This is very disconcerting to the people of Canada as well as to our caucus because we tried to inject some fairness.

I want to make a couple of points with respect to the bill. For example, the WTO is a new constitution for the globalized economy written by and for multinationals, the transnationals of the world. The government has rejected a policy of developing a social clause to the WTO that would ensure multinationals recognize basic labour and environmental standards to prevent the race to the bottom.

Even though the WTO supposedly offers a new rules based trading regime that will bring relief from trade harassment, American behaviour under NAFTA rules and evasive measures put into the American implementing legislation make it very unlikely that the Americans will play by the rules.

In my remarks today I want to focus on the American legislation and how it protects American producers and American businessmen. The Canadian legislation we see before the House today does not protect Canadians in the same way.

The biggest claim of WTO advocates is that it will inaugurate a new era of a rules based trading regime with enforceable rules regarding dumping and subsidies. The only problem is that the biggest single player, the United States, clearly has no intention of obeying the rules. We have already seen how under NAFTA rules the harassment of our trade in lumber and wheat has gone on unabated.

The results of the recent congressional elections do not give Canadians much cause for hope that this behaviour will change. More important, the Americans have written into their implementing legislation a long list of provisions that effectively guarantee that no WTO will ever overturn an American federal or state measure. The Americans have given notice that they will treat WTO rules as they have treated NAFTA rules: to ignore if they go against perceived American interests.

We in the New Democratic Party have proposed amendments that would have written into Canadian law exactly the same protection from WTO rulings the Americans have given to themselves. The government with typical gullibility about American goodwill chose to defeat our amendments. That reminds me: it is the same gullibility of the former Conservative Government of Canada. It bent over backward for the Americans and now we see the Liberals who were supposed to be different are not different. They are the same. They did exactly what the Conservative government did in the last Parliament of Canada. Liberal, Tory, same old story, I presume.

In one sense we can look forward to the American sabotage of the new WTO rules in the way that they have sabotaged the NAFTA dispute settlement mechanism. To get these rules we have sacrificed a tremendous amount of sovereignty over investment policy and social security standards. With a rules based system imposed on American protectionism we can begin to rebuild a new constitution for the global economy that represents the interests of the communities.

I share with members an incident that occurred involving myself and other members of the House of Commons last May. We are a member of the steel caucus. The steel caucus is composed of all parties with steel production in their constituencies. I am proud to say I have IPSCO, the Interprovincial Pipe and Steel Company in my district. It employs about 1,100 people. It is a very conscientious and environmentally sound corporation. It produces a significant amount of steel and pipe for the Canadian and American economies and for economies outside North America.

We visited with American congressmen and senators on the issue of steel production. The reason we were there was that Canadian steel producers had been injured by anti-dumping claims of the American steel industry. We went there to talk to the legislators because they have legislation in effect which ignores NAFTA and which ignores the WTO that we have before the House today to protect their own producers.

If they believe, if it is perceived-it does not have to be proven-to injure their own industry, they can use whatever ability they have under the legislation in effect to deflect or stop trading nations from selling that product in their country.

We have asked as a caucus to have this legislation amended to reflect the concerns of Canadian steel producers, our agricultural producers and others, including sugar, so that we are protected in the event that the WTO is injurious to Canadian producers. The government has defeated that. It ignored our requests and we are very concerned that as are the people in these industries.

The Liberal member for Vancouver Quadra gave a historical perspective as to what he thought Franklin Delano Roosevelt intended in his trade negotiations. I want to throw a quote back to the member for Vancouver Quadra from Franklin Delano Roosevelt when he was president: "The true test of progress in society is not whether we add to the abundance of those who have much but whether we provide enough for those who have too little". That is a very important message that was relevant then, relevant now with respect to governments protecting the people in their countries from injurious economic initiatives from other countries regardless of world trade regulations.

They are set up to set some standard and regulations to govern and trade by, to have economic interchange, but in the end the bottom line is that if it is injurious to your country a government is elected by the people for the people to protect the people.

However, if you pass a law that does not provide that protection, you are giving up your obligation and right to govern the people you have been elected to govern. What the heck is going on here? I cannot understand this. I do not think anybody else in the country understands this either.

What we have to do is point out to the Canadian population that Bill C-57 is injurious to the steel producers of Canada. It is injurious to the agricultural producers of Canada. It is injurious to the sugar producers of Canada and that means it must be injurious to much of Canada.

If that is the case, why are they injuring our own people? We have enough competitors out there who are taking advantage of our country and our economy. We do not have to let the walls fall down and let our mechanisms of defence collapse and encourage outside countries to rape and plunder our economy further.

The government is making a serious mistake with respect to passing Bill C-57 unamended. As a matter of fact, we have support from many people. I have a letter here from the sugar refineries. My former deskmate, a Conservative member, the member for Saint John, the former mayor of Saint John, has written to the Minister of Finance, pointing out what impact Bill C-57 will have on the sugar industry.

I can get into that in a few minutes but I want to provide some evidence from the steel producers of Canada. They have made representations to the government, to the Standing Committee on Foreign Affairs and International Trade as late as November 16 and they have indicated that Bill C-57 as proposed is going to be injurious to the steel producers of Canada. They document it in numbers.

They say that because of the anti-dumping situations and charges, they have been victims of the American steel industry. It is costing them millions of dollars. They are saying that this type of anti-dumping initiative is injurious to their exporting and steel production.

We are not dumping steel in the United States. We produce steel here and we sell it directly on a contract basis after winning a tender like any other producer would do in North America. Yet they single us out as being unproductive and as being overly competitive because they feel it is hurting their industry.

The facts show and the truth is that is not the case. The steel producers of Canada want the government to make a couple of amendments on the following points. They suggested and we have put forward this proposal in the House that the Special Import Measures Act should be amended and should provide the Canadian international trade tribunal with some authority with respect to injury on the steel exports in Canada.

Unlike the American implementing legislation, Bill C-57 provides no guidelines as to what would be acceptable evidence. Without guidelines it would be very difficult for a Canadian company to know how to demonstrate a foreseen and imminent threat of injury. American companies will have an easier task under the legislation even though the same principle of the WTO is being implemented.

The U.S. implementing legislation also provides that if dumping diminishes in reaction to the filing of a complaint, the ITC may discount evidence after the filing of its assessment of injury. This makes it easier for an injury charge to stick. There is no comparable provision in C-57.

They go on and talk about a number of other issues. Bill C-57 does not say anything about how the threat of injury should be interpreted at the time of review of an anti-dumping action. The American legislation does provide for these things.

I could go on in detail about what the steel producers feel is injurious. The point is that every time they win a contract, export the steel to the States, even though NAFTA is in existence, even though the WTO is preparing to be in existence, the Americans can say because they have lost the contracts in the open tendering process: "We are not going to let them take this contract because we are going to ask them for more information". If they ask for all sorts of information it costs Canadian steel producers literally millions of dollars to gather this information which then makes their original bid more expensive and unprofitable. It also delays and is more or less a discouraging act on the part of the Americans. They have this in the legislation.

If the Americans harass Canadian steel producers they have their law on their side and the Congress to provide them with that lever. Canadians and the Government of Canada are saying: "We are not going to be like the Americans. We do not want to provide protection to Canadians because we will be just like the Americans then".

Some things the Americans do are pretty smart. That is why they are the most successful business people in the world. That is why they have the most successful economy. They always undertake economic initiatives to the benefit of their country.

New Democrats oppose Bill C-57 on the basis that it is injurious to the economy of Canada.

[Simon de Jong, NDP, Regina—Qu'Appelle, SK]

Mr. Speaker, in the time remaining I also wish to speak on Bill C-57. I wish to point out that as New Democrats we are not against free trade per se. We are in favour of a genuinely free trade on a level

playing field. NAFTA, the free trade agreement and Bill C-57 do not lend themselves to a level playing field.

The example the Europeans have with the European community is more to our liking as an example of where there is genuine free trade. The Europeans not only recognize that to bring down the customs barriers and allow the freer trade it is not just economics that are involved but also the social, environmental and labour standards.

They have made certain that countries like Spain, Portugal and Greece that have traditionally low social, environmental and labour programs have implemented policies to raise them up so that there is a level playing field. All the industries from Holland, France and Germany do not go down into cheap labour countries such as Spain, Portugal and Greece. In other words, care and attention was given to implementing their free trade agreements. That is basically what we seek as well, a genuine playing field, to raise the bottom up rather than to bring the top down to the bottom.

Canadian workers will suffer and government revenues will suffer. What we are entering into is a global trading pattern in which industries will find and locate where labour is cheapest. They will be able to get the resources at the cheapest possible price and locate their head offices where they pay the least amount of tax. It is smart business. If you were in business that is how you would set up your business arrangements. You would make certain that your natural resources were going to cost the least, that your labour would cost the least and that you would pay the least amount of tax. That is logical.

These agreements are allowing them to escape any social responsibility, any economic responsibility to nation states.

Here we are living in a period in the evolution of the human race when through technological changes we can produce an abundance such as the human race has never seen before. Yet countries like Canada and the United States are declining further and further into poverty, into nations where there are fewer resources and less wealth to share and for their citizens to enjoy.

We are seeing decreases in our standard of living in the midst of plenty. Is it not because of the way our economy is structured? The wealth that is produced is not being distributed. Large corporations are escaping their social responsibilities by locating their head offices offshore, which is allowed under these agreements, and so government revenues are declining. The nation states and the sovereignty and the sovereign power of the nation state are slowly eroding.

That is why I am amazed to see the Bloc supporting this. By supporting this, even if Quebec-I hope it will not, and I suspect it will not-succeeds in establishing itself as a nation, by the time it gets there it will find that the nation will not have any power left at all. It will all have been given away through these trade agreements.

We are talking about, this little corner of this House, the only voice of opposition to this massive change, is how we as a country and how our economy operates and how we regulate ourselves in the sources of revenue and jobs and wealth. What we are objecting to is the unfairness of it, how these trade agreements will benefit the few at the expense of the many, how as a country and as a sovereign nation we will suffer and we will decline.

I implore the government, which paid lip service when it was in opposition and opposed NAFTA and the free trade agreement, which now seems to embrace these agreements, to maintain some social conscience, to demand that this government moves to implement into these free trade agreements social, environmental and labour components; to make certain that there is a genuine level playing field, to make certain that the progressive and historic gains that we have made in this country in our economy, in our wealth, are maintained and protected rather than being drawn down to the lowest common denominator.

I appeal to the genuine Liberals to exert the influence in their caucus and on their government to make certain that the Government of Canada stands up for the workers and the ordinary people of Canada, not to sell them down the river like the previous Tory governments have done.

[Peter Milliken, Liberal, Kingston and the Islands, ON]

On a point of order, Mr. Speaker. It is almost 5.30 but I think you might find a disposition on the part of the House to complete the debate on this important piece of legislation this afternoon. I believe you will find that there are two remaining speakers and if each were to be allotted 10 minutes, both being members from this side of the House, without questions or comments, we could conclude the debate at 5.50. At that time I think you would find also there would be consent to have the question put on the bill and the vote called at that stage.

[The Acting Speaker (Mr. Kilger)]

Is there unanimous consent?

[Some hon. members]

Agreed.

[Gurbax Malhi, Liberal, Bramalea—Gore—Malton, ON]

Mr. Speaker, I am pleased to participate in the debate on Bill C-57, an act to implement the agreement establishing the World Trade Organization.

I would like to reflect today on how important the adoption of this legislation is to the economy of Canada in general and to the economy of my riding of Bramalea-Gore-Malton in particular.

In order for this government to meet its objective of creating jobs and improving the economy of Canada, it must enhance the ability of the nation to export to the rest of the world. The legislation before us will play an essential role in improving Canada's access to the ever-growing international markets. By

creating a more open and stable international trading environment, the agreement establishing the World Trade Organization will generate and increase Canadian exports and investments.

Canadian governments have long recognized the importance of efforts to liberalize trade. Canada ranks among the top trading countries in the world.

Over the past two decades Canadian exports have grown faster than exports from Europe and at about the same pace as U.S. exports. The free trade agreement signed with the U.S. in 1989 has resulted in an annual gain in real income in the range of 2.5 per cent.

Every region and every sector of the Canadian economy has benefited from the liberalization of Canada's trade with its most important trading partner.

A recent study by the C.D. Howe Institute on the effects of the FTA concluded that Canada's exports to the United States over the first three years of the agreement performed the strongest in those sectors that were liberalized by the agreement, particularly non-resources based manufacturing.

Bramalea-Gore-Malton is in a region of the country that depends most significantly on non-resource based manufacturing. Provisions of this bill dealing with agriculture are extremely significant in that for the first time the agriculture sector will be brought under the rules-based multilateral regime.

The significance of these changes will be reflected in my riding in the improvement of market opportunities for processed foods. We must support this legislation to ensure that Canadians will be able to take advantage of improved access to markets.

In the industrial products sector, for example, the Uruguay round agreement provides for reductions in the tariffs by one-third and tariffs in 10 sectors have been eliminated entirely.

In terms of improving trade opportunities, Canadian exports to the European Union will benefit from tariff reductions of almost 60 per cent. Tariffs on Canadian exports to Japan will be reduced by 70 per cent.

These tariff reductions will have a significant impact on companies in Bramalea-Gore-Malton that export to either Europe or the emerging markets of the Pacific rim.

Better access, reduced tariffs and a competitive attitude recognizing the worldwide opportunities presented will be the cornerstone of growth in the future.

This bill is also significant to my riding because for the first time trade in services and trade related intellectual property are brought within the framework of multilateral rules. These rules will provide a stronger basis for the development and transfer of technology.

The agreement promotes continued liberalization of trade in services and intellectual property in an area estimated to be worth some $2 trillion annually. Increased growth in this sector is anticipated and in fact corporations within my riding are well placed to benefit from expanding opportunities in these sectors.

It is significant that the negotiations leading to the establishment of a World Trade Organization benefited greatly from the process of consultation that has taken place.

The business and agricultural communities, as well as the provinces, were closely consulted throughout the course of the negotiations. The fact that prior consultation was designed into this process means that the results reflect the realities of doing business in all regions of the nation.

The legislation before us is extremely important as the World Trade Organization will replace the existing GATT. The World Trade Organization along with the World Bank and the International Monetary Fund will now operate in concert as the foundation of a worldwide financial and commercial structure. The significance of this should not be underestimated as the development of new global trade rules and negotiations aimed at furthering liberalization of trade worldwide will now be provided with a forum.

My support of this bill reflects not only the benefits that will accrue to my riding, but the benefits that Canada as a nation will no doubt enjoy. I urge my fellow members to support Bill C-57 and swiftly move to the establishment of the World Trade Organization.

[Rose-Marie Ur, Liberal, Lambton—Middlesex, ON]

Mr. Speaker, I am pleased to take part in today's debate on the third reading of Bill C-57, an act to implement the agreement establishing the World Trade Organization. The main aim of this legislation is to establish the new World Trade Organization which will administer the recently concluded general agreements on tariffs and trade signed by 123 governments in Morocco in April of this year.

This bill will set the stage for a new era in international trade, making Canada a full participant in the most comprehensive trade agreement in history. Bill C-57, the implementation legislation, will modify existing legislation and contains only those changes required to meet Canada's obligations under the international agreement.

Canada and a host of other nations went through seven and one-half years of difficult, often very frustrating, multilateral negotiations with the Uruguay round of GATT. Throughout the negotiations, Canada aggressively pursued an agreement to pave the way for expanded trade and investment worldwide. We certainly did not get everything we wanted, but that is the nature of most negotiated settlements.

I intend to offer my support to this bill, although I must admit my support is tempered by cautious optimism. There are so many unanswered questions associated with what can or should be achieved in this new era of global trade. Until we become familiar with the ways and means of this new trading framework, uncertainty is bound to linger.

The Uruguay round covered 15 different trade areas including services, government procurement and a new set of trade dispute rules. We all know how close we came to not having an agreement at all. Had Canada and other nations not signed this trade deal it is open to question where we would have stood. It is possible that business would have continued as usual, but very unlikely.

Several very serious trade disputes had been piling up between the United States, the European community and Japan and were put on hold pending the outcome of the Uruguay round. As a middle economic power, Canada often found itself in the crossfire between these formidable trading blocks and our interests suffered as a result. To that end Canada was forced, after standing completely alone, to abandon its primary aim, the strengthening and clarification of article XI, and instead was compelled to protect its supply managed products by an initial level of high tariffication rather than quotas.

I should state that as member for Lambton-Middlesex the primary industry in my riding is agriculture. Statistics show that nearly three-quarters of a billion dollars worth of farm products are produced each year in the counties of Lambton and Middlesex. More than one-half billion dollars worth of farm supplies and equipment are purchased.

To say that my constituents are concerned about what lies ahead of them would be an understatement. Frankly, I do not blame them for being concerned as we embark on a brand new era in global trade, where to a certain extent a large degree of blind faith is required. As parliamentarians I believe our main challenge, given the kind of financial straits in which we find ourselves and given the international obligations under which we are now operating, is to search for a proper balance between the rigours and the power of the marketplace and the establishment of a greater degree of fairness to farmers in the farming community. A farming community is worth preserving and I cannot overstate the need to use and develop our talents in doing so.

It would be a serious mistake for Canada to become complacent now that 10 years of trade negotiations, starting with the Canada-U.S. free trade agreement, have finally ended. The globalization of large corporations means there is a whole host of problems around which we have to get our minds.

International trade is no longer among nations but among highly organized transnational corporations which have operations around the world. That means there must be international rules on such things as government regulations, competition laws, industrial standards and even rules governing labour markets. The World Trade Organization represents just a beginning in this process.

For example, members of the House should know that only a handful of companies control the processing of Canada's agricultural products. If we do not address this reality, then I am truly afraid for the future of Canada's farmers. If there is no incentive to farming then our sons and daughters will choose not to carry on. If a country cannot feed itself then it becomes a beggar in the world economy.

There are things we do right in Canada, that are the envy of the world. Internationally Canada has a reputation as a reliable supplier of some of the safest and highest quality, most diversified and unique agri-food products of any country in the world. Canada's agri-food industry accounts for 8 per cent of the GDP, over $15 billion in annual export sales, 40 per cent of Canada's positive balance of trade, two million jobs or 15 per cent of all jobs and $70 billion worth of goods produced each year.

We are told that the World Trade Organization will remedy such things as export enhancement subsidies and unilateral trade sanctions, that it will command sufficient confidence in its impartiality and efficiency, that it will uphold multilateral rules in the face of powerful protectionist interest groups and national governments.

I am gratified that there is a growing consensus in Canada that we have to develop our own strategies in dealing with the new realities that confront us. For example, I am very impressed with the work being done over the last six months by the Standing Committee on Agriculture and Agri-Food.

Since May the committee has embarked on an ambitious study on the future of agriculture in order to evaluate present agri-food objectives and modify them for the year 2000 and beyond. Using the criteria of fairness, sustainability and efficiency, the committee is examining the agri-food sector role in rural life and in the Canadian economy and is involving producers, processors, consumers and other interested parties in developing a long term national strategy for agriculture.

Taken together, these components will constitute an overall farm policy that will take the Canadian agri-food sector into the

next century. It is precisely grassroot efforts like these that will prepare Canadian agriculture for the challenges before us.

I would like to take this opportunity to salute the agriculture committee and its efforts and I have every confidence that it will be successful in its endeavours. Hopefully, the Uruguay round will be the last marathon bargaining session.

I believe there will be a preference instead for more limited and focused negotiations on a variety of sectors and that is as it should be. Canada has in the past invested significantly in agricultural research and has achieved one of the highest international annual growth rates of agricultural production over the past two decades.

Here is a case in point. Canola, developed in Canada by the federal government researchers, grew from a zero dollar per year industry in 1974 to an estimated $9.35 billion per year industry in 1994.

Tragically Canadian investment in growth enhancing measures such as research and market development in the agri-food sector has steadily declined in recent years. We must reverse this trend precisely because we will find ourselves in an even more competitive marketplace under the auspices of the WTO.

Let me say in conclusion that we must develop a strategy for agriculture between the various levels of government and the private sector, including the various farm organizations. This need is even more acute within the highly competitive global marketplace and it involves three inter-related components.

We must remain committed to agriculture and agri-food and other natural resource sectors which are the cornerstone of Canada's economy.

We must strengthen our investment in agri-food research. We must ensure that the farmers of this country who produce $70 billion worth of goods each year get a fair share of the agricultural dollar.

Using these criteria once we have recommitted ourselves to building a solid domestic foundation in Canada's agricultural sector, I truly believe that we will be able to compete with anyone in the world.

[The Acting Speaker (Mr. Kilger)]

Is the House ready for the question?

[Some hon. members]

Question.

[The Acting Speaker (Mr. Kilger)]

Is it the pleasure of the House to adopt the motion?

[Some hon. members]

Agreed.

[Some hon. members]

No.

[The Acting Speaker (Mr. Kilger)]

All those in favour of motion will please say yea.

[Some hon. members]

Yea.

[The Acting Speaker (Mr. Kilger)]

All those opposed will please say nay.

[Some hon. members]

Nay.

[The Acting Speaker (Mr. Kilger)]

In my opinion the yeas have it.

And more than five members having risen:

Call in the members.

And the bells having rung: